QUESTION - Production Budget
Chrystal Telecom has budgeted the sales of its innovative mobile phone over the next four months as follows:
Sales in Units
July - 30,000
August - 45,000
September - 60,000
October - 50,000
The company is now in the process of preparing a production budget for the third quarter. Past experience has shown that end-of-month finished goods inventories must equal 10% of the next month's sales. The inventory at the end of Jun was 3,000 units.
Required: Prepare a production budget for the third quarter showing the number of units to be produced each month and for the quarter in total.